SGX

SGX: Securities trading volume reported a slight growth in Jul from Jun, while derivatives and commodity activities grew, led by China A50 futures, iron ore derivatives and rubber futures. The total value of securities traded declined 24% y/y but was up 2% m/m in Jul to $21.0b, with an average daily traded value of $1.0t (+6% y/y). Derivatives volume was at 8.9m contracts, unchanged y/y and up 3% m/m, with the China A50 futures being the most active contract with 3.2m contracts traded (+85% y/y). Volume of the India Nifty futures was 1.6m contracts (+29% y/y), while the MSCI Taiwan futures volume was down 15% at 1.6m contracts and the Nikkei 225 futures volume was down 45% at 1.5m contracts. Commodities continued to outperform, with commodities volume totalling 211,537 contracts, double that of the previous year, led by iron ore derivatives (157,673 contracts) which were three times the volume a year earlier, and a 20% rise in rubber futures to 38,780 contracts. SGX continues to focus on a series of transformative initiatives in the securities market, which include new product launches, international distribution and to strengthen its regulatory and risk management capabilities. Investors could also expect SGX to be on the lookout for further tie-ups and JVs in the commodities and derivatives segment, as it attempts to diversify from its traditional securities business and increase its product offering. At the current price, SGX trades at 21.9x forward P/E, in line with its regional peers. Overall, the street has 4 Buys, 8 Holds and 1 Sell rating with a consensus TP of $7.47.